Is Cineworld closing down? Cinema chain with branch in Newcastle preparing to file for bankruptcy

Cineworld is preparing for bankruptcy, according to reports. 

Based in London, owner Cineworld Group has 128 cinemas in the UK and Ireland as well as 751 in total around the world - and one of those is here in Newcastle.

It is the second-largest cinema chain in the world after AMC Theatres.

According to reports by The Wall Street Journal, the conglomerate is set to “file for bankruptcy”.

Philippa Childs, head of entertainment and media union Bectu, said: “This is very worrying news, not least for the UK’s Cineworld and Picturehouse workforce who have already been through a tumultuous time during the pandemic.

“The UK’s cinema industry suffered an incredible blow due to Covid-19 and this latest news will be very unsettling for cinema workers.

“We will do everything we can to support our members during this challenging time and will be looking to Cineworld to mitigate the impact of any bankruptcy arrangements on its employees.”

The reports cast uncertainty over the future of thousands of workers at its 127 UK cinemas.

Cineworld employs around 28,000 workers globally across 790 sites with operations in 10 countries.

Here is everything you need to know.

Why is  Cineworld Group preparing to  file for bankruptcy?

Citing sources with knowledge of the situation, The Wall Street Journal says that Cineworld Group is poised to declare bankruptcy as it struggles to rebuild its attendance from pandemic lows.

Why is Cineworld Group struggling?

Cineworld warned earlier this week that audience numbers had been lower than expected and that they would remain low until November owing to "limited" film releases.

In a statement the firm said: “Despite a gradual recovery of demand since reopening in April 2021, recent admission levels have been below expectations.

“These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term.”

How much has the company owed?

At the end of the previous financial year, the company was saddled with 4.8 billion dollars in debt (£4 billion).

Liberum analyst James Wheatcroft said its heavy debt burden means a balance sheet restructuring will “likely leave little for existing Cineworld shareholders”.

It comes after the business posted a loss of 565.8 million US dollars (£429 million) in 2021 as revenues were boosted by higher admissions.